Chart of the Week

How high can feeder cattle prices go? The answer to that is easily answered by another question. How low can corn prices go which is not so easy to answer. Feeder cattle futures prices are at both life of contract and record high levels. Correspondingly, corn futures prices are at life of contract lows. The opposite relationship between feeder cattle prices and corn prices is evident. A rule of thumb often used is "for every 10 cent/bushel change in corn prices, change fall calf prices $1/hundredweight in the opposite direction." Declining corn prices are resulting from the prospects for a record high over 14B bushel corn crop. Feeder cattle supplies outside feedlots are at the lowest levels for many years.